By Gerry Barker
November 7, 2016
The most powerful civil servant in the Guelph administration is Deputy Chief Administrative Officer (DCAO) Mark Amorosi.
His field of management control covers the spectrum of staff responsibility. According to the city staff organization chart, Mr. Amorosi is chief of Finances, Human Resources, Corporate Communications and Customer Services, Court Services, Information Technology, Project Management Office, and the City Clerk’s department. Senior managers in those key departments report to Amorosi.
Mr. Amorosi, an eight-year veteran of the administration has climbed steadily in the ranks. He was hired to head the small (at the time) Human Resources (HR) department that included control over, union and management association negotiations; hiring and firing, staff benefits, personnel performance reviews, and examining personnel markets in competitive jurisdictions.
In short, all personnel matters filter through his field of responsibility. The staff in 2008 was growing rapidly as the new council under Mayor Farbridge was fulfilling its agenda of changing the city. The size of the city staff in 2008 was about 1,400. However for discussion purposes, Mr. Amorosi’s HR department did not report the details of the police, fire and EMS staffs who are also city public employees.
Currently the 2015 city staff count is 1,944, all of whom are members of the Ontario Municipal Employee Retirement System (OMERS). It does not include those employees who are members of the managerial association or other organized units within the staff. All city staff is contributing to their respective retirement organizations and their defined pensions. This means the municipality is bound to paying retirees the indexed benefit for their lifetime of the employee as well as surviving spouse.
Did I mention that the average age of retirement of OMERS members is 55? For actuarial purposes, the life expectancy of a 55 year old is an additional 25 years. It is a huge and growing liability to Ontario’s 445 municipalities. Guelph has two future retirement liabilities on it balance sheet totaling $31 million and growing by $3 million a year. That is not cash on the books but an entry to track the future liabilities of staff retirement, both unionized and managerial. Currently there are two cash reserves dedicated to support the liabilities. The OMERS liability of $14,519,000 has a reserve fund of $1,799,000. The liability of the managerial staff is $16,850,000 with a reserve fund of $1,147,000.
The cash coverage of those future liabilities is just 9.3 per cent.
Again it’s pushing the ball down the line with expectation of the next 50 years, for example, the council will have to have the financial underpinning to guarantee the promised benefits for its retired employees who could number in the thousands. It is even scarier that OMERS is underfunded by $7 billion. If salaries of public workers keep escalating it will only make matters worse.
Mr. Amorosi has been in charge of HR since was hired and within two years took on Legal Services in his Executive Director managerial portfolio. On the surface, at the time, this looked like a good fit because HR needed legal support due to the numerous contract negotiations and staff movement. On his watch, the city staff has grown beyond the growth of population.
Currently, CAO Derrick Thomson is in charge of legal services and the city solicitor’s office.
Mr. Amorosi’s next major move up the senior management ladder came in November 2014 following the civic election. Within a very short period of time, CAO Ann Pappert announced a major shift in responsibilities before Mayor Elect Cam Guthrie took over December 1, 2014. It is not known if Ms. Pappert briefed the mayor of the senior staff reorganization or not.
Executive Director Janet Laird resigning, and Executive Director, Derek McCaughan, leaving the city staff for unknown reasons caused this change.
This action was the birth of the title, “DCAO.” There were three DCAO’s plus Ms. Pappert remaining: Mark Amorosi, Derrick Thomson and Chief Financial Officer Al Horsman. Ms. Pappert left the city in May this year to take a job with the Ontario government. Mr. Horsman left in August 2015 to take the job of CAO of Sault Ste Marie.
As it has turned out, Mr. Horsman was the city’s last CFO. Under Amorosi’s watch, he has gone through two General Managers of Fincance and appointed a third as CFO, General Manager of Finance and Treasurer. That individual is currently on maternity leave until next year. Horsman’s job was handed to Mark Amorosi who has been operating the Finance department for the past 24 months. He has played a major role in two city budgets and now is involved with the 2017 budget with CAO Derrick Thomson.
This is where Mr. Amorosi chooses to ignore a thorough analysis performed by Guelph resident Pat Fung; his credentials include being a Chartered Accountant and a Certified Public Accountant. Designations not possessed by Mr. Amorosi.
Mr. Fung presented his financial analysis of the city’s finances to members of council August 18 and again two weeks ago at a meeting of council. During his five-minute presentation he asked a direct question of Mr. Amorosi and the Mayor intervened saying he cannot question the staff “in this way.”
The Fung report documentation for his analysis was based on the city’s own published financial statements over four years and a report in 2014 to the city by BMA management consultants of Hamilton.
Not only did Mr. Fung demonstrate how Guelph’s operating costs were higher than Ontario cities of similar size but also were 50 percent higher than either Kitchener or Cambridge.
The figures clearly show a four-year pattern of wasteful spending with major negative variances, (excessive spending over budget) at year end. This resulted in a depletion of reserves every year that CAO Ann Pappert was in charge.
Before the 2014 civic election, Ms. Pappert when revealing the settlement with Urbacon Buildings Group costing $8.96 million, announced that $5.7 million was used to pay the lawsuit costs. Ms. Pappert said the three reserves used would be repaid with annual replenishment of $900,000 a year from operating budgets.
Then Mr. Amorosi, now head of finances, was involved in the 2015 budget in which Coun. Karl Wettstein moved to reduce the payback to $500,000 a year and the majority of council agreed. After reviewing the 2015 Financial Information Report, I could find no reference to any money being used to replenish those specific reserves.
Then along came the Dec 10 closed-session Council meeting that awarded three senior managers, Mark Amorosi among them, increases ranging from 14 to 19 per cent for 2015. The public did not learn of these excessive increases until they were revealed when the Provincial Sunshine List was published in March 2016.
The Guelph council or the three recipients have never admitted or commented on the salary increases or the reasons for awarding them.
When you translate this egregious deliberate cover-up to the way the city is being managed, the Fung Analysis becomes more pertinent, particularly his recommendations to reduce operating and capital spending costs.
I have contended for some time that this is the way three terms of councils, supported by city staff, have misled the citizens who are taxed excessively and forced to pay high user fees for a wide range of “services” ranging from storm water maintenance to waste collection.
Mr. Amorosi heads Court Services as part of his management control portfolio. The 2015 annual official Financial Information Report reveals that amount of fines levied in the provincial offenses court located in the old City Hall for 2015 was $14,337,000. But $8,022,000 of that amount is considered uncollectable or 55.9 per cent of those fined got away without paying.
Hmmm. If Mr. Amorosi was in private business and was responsible for company revenues, how long would he last when he reported a 55.9 per cent failure to collect court-awarded revenue?
Ask yourself, does this demonstrate the rationale that led to his 2015 salary increase of $26,868?